June 11, 2014
For the second time in the past nine months, Latham & Watkins litigators have obtained a complete defense verdict for their client in a jury trial of insider trading charges brought by the United States Securities and Exchange Commission ("SEC").
On June 6, 2014, following an 11-day trial in the United States District Court for the Central District of California, the jury deliberated for just four hours before delivering a complete defense victory for Manouch Moshayedi, the former Chief Executive and Chairman of sTec Inc. The SEC’s complaint, one of the largest insider trading cases ever filed by the SEC, had alleged that Moshayedi engaged in insider trading and violated the anti-fraud provisions of the federal securities laws in connection with a secondary offering of approximately $267 million worth of sTec stock owned by Moshayedi and members of his family. The SEC sought a final judgment ordering Moshayedi to relinquish any trading profits and to pay prejudgment interest and financial penalties, and the agency also sought to permanently bar Moshayedi from acting as an officer and director of any registered public company.
In October 2013, Latham litigators also won a complete defense verdict in a high-profile securities fraud suit brought by the SEC in the US District Court for the Northern District of Texas against Mark Cuban, the billionaire investor, entrepreneur and owner of Landmark Theaters and the NBA's Dallas Mavericks franchise. The SEC alleged that Cuban violated insider trading laws by selling his share of a Canadian internet search company based on material non-public information. After a three-week trial, the jury found in favor of Cuban on all of the SEC’s claims.
In the Moshayedi case, the Latham trial team was led by partners Patrick Gibbs, Matthew Rawlinson and Sean Berkowitz. Thomas Zaccarro of Paul Hastings LLP served as co-counsel at trial. The case is U.S. Securities and Exchange Commission v. Manouchehr Moshayedi, case number 8:12-cv-01179, in the US District Court for the Central District of California.
In the Cuban case, the Latham trial team was led by partner Christopher Clark, and the defense team included Stephen Best of Brown Rudnick LLP and Thomas M. Melsheimer of Fish & Richardson PC. The case is U.S. Securities and Exchange Commission v. Cuban, case number 3:08-cv-02050, in the US District Court for the Northern District of Texas.